Northwest Gas (NWN) AI Stock Analysis

• Market Cap: $1.68B
• Dividend Yield: 4.75%
• Average Volume (3M): 262.66K
• Price to Earnings (P/E): 16.2
• Beta (1Y): 0.26
• Revenue Growth: 8.40%
• EPS Growth: 17.90%
• Country: US
• Employees: 1,452
• Sector: Utilities
• Sector Strength: 72
• Industry: Regulated Gas
• EPS (TTM): 0.01
• Shares Outstanding: 40,938,430
• 10 Day Avg. Volume: 262,155
• 30 Day Avg. Volume: 262,659
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.35
• Enterprise Value/Revenue: 3.20
• Enterprise Value/Gross Profit: 6.87
• Enterprise Value/Ebitda: 9.21
• 1Y Price Target: $50.00
• Price Target Upside: 21.07% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 71 Outperform
• Price Target: $45.00 ▲(8.96% Upside)

Northwest Gas's overall stock score reflects strong earnings growth and strategic expansions, supported by reasonable valuation and positive corporate developments. However, high leverage and cash flow challenges weigh on the score, necessitating improvements in financial stability.

Positive Factors

Acquisitions

NWN's acquisition of SiEnergy is expected to boost customer growth significantly over the next five years.

Earnings Guidance

NWN introduced 2025 GAAP EPS guidance that is significantly higher compared to the previous forecast and consensus.

Financial Performance

Operating EPS exceeded expectations due to customer growth in Texas and a recent acquisition.

Negative Factors

Debt Levels

NWN's debt-to-capital ratio increased to 61.3%, up from 57.6% in the prior quarter.

Revenue Forecast

Revenue forecasts have been reduced due to potential lower natural gas consumption and price uncertainties.

Stock Performance

Year to date, NWN shares have increased 3% compared with the Philadelphia Utility Index's 13% increase.

Northwest Gas Business Overview & Revenue Model

Company Description

Northwest Natural Holding Company, through its subsidiary, Northwest Natural Gas Company, provides regulated natural gas distribution services to residential, commercial, industrial, and transportation customers in Oregon and Southwest Washington. The company also operates 5.7 billion cubic feet of the Mist gas storage facility contracted to other utilities and third-party marketers; offers natural gas asset management services; and operates an appliance retail center. In addition, it engages in the gas storage, water, non-regulated renewable natural gas, and other investments and activities. The company provides natural gas service through approximately 786,000 meters in Oregon and southwest Washington; and water services to a total of approximately 80,000 people through approximately 33,000 water and wastewater connections in the Pacific Northwest and Texas. Northwest Natural Holding Company was founded in 1859 and is headquartered in Portland, Oregon.

How the Company Makes Money

Northwest Gas generates revenue primarily through the distribution of natural gas to its customers, which includes residential, commercial, and industrial sectors. The company earns money by charging customers for the volume of gas consumed, in addition to a fixed distribution charge that covers the costs of operating and maintaining its pipeline infrastructure. Revenue is also derived from utility rates approved by state regulatory bodies, which allow NWN to recover costs and earn a reasonable return on investment. Significant partnerships with local governments and regulatory agencies play a crucial role in setting these rates and ensuring compliance with safety standards. Additionally, NWN may benefit from incentive programs or grants aimed at promoting energy efficiency and cleaner energy sources, which can create additional revenue streams.

Northwest Gas Financial Statement Overview

Summary

NWN exhibits steady revenue growth and sound operational efficiency, supported by solid margins. The balance sheet shows sustainable leverage levels, although reliant on debt. Cash flow performance highlights strong cash generation but is overshadowed by negative free cash flow. Overall, NWN maintains a stable financial position with areas for improvement in cash management.

Income Statement

NWN shows a consistent revenue growth trajectory with the latest TTM revenue growth of 5.3%. The gross profit margin has improved to 45.1% TTM, reflecting enhanced cost management. However, net profit margin remains moderate at 8.5% TTM. EBIT and EBITDA margins are healthy at 19.4% and 33.5% TTM, respectively, indicating stable operational efficiency.

Balance Sheet

The debt-to-equity ratio stands at 1.64, indicating a moderate level of leverage. Return on equity is solid at 7.1% TTM, suggesting effective utilization of shareholder funds, while the equity ratio is 25.5%, which is typical for the industry. The balance sheet reflects a stable financial position, though with a reliance on debt financing.

Cash Flow

Operating cash flow to net income ratio is robust at 2.48 TTM, demonstrating strong cash conversion. However, free cash flow remains negative, posing a concern for liquidity. The negative free cash flow growth rate of -17.8% from the previous period raises caution on capital expenditure management and cash reserves.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.24B	1.15B	1.20B	1.04B	860.40M	773.68M
Gross Profit	576.24M	397.61M	423.87M	341.23M	329.12M	300.50M
EBITDA	429.89M	348.09M	344.49M	303.37M	264.09M	238.09M
Net Income	103.25M	78.87M	93.87M	86.30M	78.67M	76.78M
Balance Sheet
Total Assets	5.79B	5.23B	4.87B	4.75B	4.06B	3.76B
Cash, Cash Equivalents and Short-Term Investments	102.58M	38.49M	32.92M	29.27M	18.56M	30.17M
Total Debt	2.46B	1.96B	1.75B	1.68B	1.52B	1.34B
Total Liabilities	4.33B	3.85B	3.58B	3.57B	3.13B	2.87B
Stockholders Equity	1.46B	1.39B	1.28B	1.18B	935.15M	888.73M
Cash Flow
Free Cash Flow	-182.16M	-194.12M	-47.40M	-191.69M	-134.90M	-137.87M
Operating Cash Flow	235.98M	200.28M	279.95M	147.67M	160.35M	143.02M
Investing Cash Flow	-784.43M	-428.99M	-335.50M	-435.46M	-300.12M	-294.28M
Financing Cash Flow	574.08M	227.06M	64.21M	301.63M	131.44M	171.78M

Northwest Gas Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 41.30
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NWN, the sentiment is Positive. The current price of 41.3 is above the 20-day moving average (MA) of 40.63, above the 50-day MA of 40.52, and above the 200-day MA of 40.31, indicating a bullish trend. The MACD of 0.25 indicates Negative momentum. The RSI at 55.16 is Neutral, neither overbought nor oversold. The STOCH value of 60.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NWN.

Northwest Gas Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NJR	77 Outperform	$4.69B	11.41	18.03%	3.82%	21.88%	71.35%
NWN	71 Outperform	$1.68B	16.24	7.36%	4.75%	8.40%	17.90%
SR	71 Outperform	$4.52B	16.55	8.37%	4.04%	-6.65%	11.47%
CPK	71 Outperform	$2.92B	22.12	9.25%	2.10%	19.02%	20.13%
OGS	68 Neutral	$4.52B	17.99	8.24%	3.49%	13.43%	6.49%
Sector *	67 Neutral	$17.59B	18.19	5.33%	3.63%	7.33%	12.21%
SWX	65 Neutral	$5.58B	28.86	5.41%	3.19%	-10.07%	5.98%

Northwest Gas Corporate Events

Northwest Gas Subsidiary Issues $185M Senior Notes

On August 25, 2025, SiEnergy Gas, LLC, a subsidiary of Northwest Natural Holding Company, issued $185 million in senior notes to institutional investors. The proceeds from these notes, which are secured by a lien on SiEnergy’s assets, will be used for general corporate purposes, including debt repayment, potentially impacting the company’s financial flexibility and market positioning.

Northwest Gas Modernizes Governance with Bylaw Amendments

On July 23, 2025, Northwest Natural Holding Company approved significant amendments to its bylaws. These changes include updates to procedural and disclosure requirements for shareholder meetings, extending notice periods, revising proposal submission deadlines, and permitting electronic communications. These amendments aim to modernize and simplify governance processes, potentially enhancing shareholder engagement and operational efficiency.

Northwest Gas Appoints New Board Directors

On July 3, 2025, Northwest Natural Holding Company announced the appointment of Peter J. Bragdon to its Board of Directors and the Board of its subsidiary, Northwest Natural Gas Company, effective July 12, 2025. Bragdon, who has extensive leadership experience at Columbia Sportswear Company, will serve as an independent director. Additionally, Dave Drinkward, President and CEO of Hoffman Construction Company, was appointed as an independent director to the NW Natural Board effective June 30, 2025. These appointments are expected to bring valuable insights and leadership to NW Natural as it continues to grow, aligning with the company’s core values and commitment to the Pacific Northwest community.

Northwest Gas Awaits Approval for Revenue Increase

On December 30, 2024, NW Natural filed a request for a general rate case with the Public Utility Commission of Oregon, seeking a $59.4 million annual revenue increase. By June 23, 2025, a stipulation was filed with the OPUC, proposing a $21.3 million revenue increase, which includes $4.8 million for depreciation, pending completion of capital projects. The stipulation, not opposed by key environmental groups, awaits OPUC approval, with new rates expected by October 31, 2025.